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Thursday, Mar 28, 2024
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Region Receives $24.57B in Pentagon Spending

Civilian taxpayers got a rare look from the bridge of the USS Ronald Reagan during a recent Fleet Week open house.

The San Diego Military Advisory Council recently offered a wider vista — taking in the entire county — in a newly updated military economic impact study.

An aircraft carrier such as the Reagan pumps roughly $250 million of direct spending into a community annually, and has a total economic impact just short of $500 million when multipliers are considered, the group says.

Total Pentagon spending in the San Diego County is estimated at $24.57 billion in fiscal 2013, which ends today. That spending is expected to fall slightly in 2014 as U.S. forces leave Afghanistan and Congress pushes the Pentagon to cut costs.

The $24.57 billion counts salaries for uniformed and civilian employees of the U.S. Navy and U.S. Marine Corps. It counts defense contractor revenue, pensions collected by military retirees, housing allowances and other, smaller disbursements.

All told, the Pentagon spends locally with the economic heft of a small city. The study says the Defense Department gives San Diego County an amount equal to the gross regional products of El Paso, Texas or Akron, Ohio.

Total Pentagon spending is expected to fall a little less than 1 percent to $24.35 billion in fiscal 2014, which begins tomorrow, the study forecasts.

The military advisory council is a civilian group that regularly brings military and business leaders together. It commissioned its fifth annual study through the Fermanian Business & Economic Institute at Point Loma Nazarene University.

The Pentagon employs a large number of civilians in San Diego, such as the staff of the U.S. Navy labs on Point Loma. The study shows total civilian salaries steadily rising from $1.84 billion in fiscal 2011 to slightly less than $1.97 billion in fiscal 2013. It pegs civilian salaries at $1.97 billion in fiscal 2014, despite threats of federal budget cuts and furloughs.

Also rising are retirement and veterans benefits.

Active duty salaries are expected to decline by about 1 percent in 2014, to $6.58 billion.

The study says the county’s defense contractors may see procurement outlays fall 2.5 percent from $10.09 billion in 2013 to $9.83 billion in the new fiscal year.

The study presented a list of top 10 defense contract recipients, though data was from 2012. General Atomics, which makes remotely piloted military aircraft, received $2.4 billion in defense contracts that year. Northrop Grumman was second, with $1.54 billion.

Budget sequestration continues to create unease in the defense community, for the second year in a row. Congress fell back on the program of across-the-board budget cuts after they could not agree on how to cut the federal deficit. Active duty salaries will not be cut under sequestration, Defense Department leaders say, though that approach puts more pressure on the remainder of the Pentagon budget.

The Pivot to the Pacific — an Obama administration initiative which would bring more military assets to the West Coast to counter China or deal with other Asian flash points — has the potential to bring more resources to San Diego.

The Navy plans to redeploy its forces, taking the 50-50 percent split between the Pacific and Atlantic oceans and making it a 60-40 percent split by 2020. San Diego stands to benefit, the study says.

San Diego is currently home to 53 warships. The report emphasizes that each adds value to the local economy.

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